Toyota no longer profitable in North America, reevaluating operations

Chairman and CEO of Toyota Motor Sales USA, Yoshimi Inaba said that Toyota is currently reviewing its entire operation in the United States. He said that the automaker must decide on whether to close the 25-year-old New United Motor Manufacturing Inc (NUMMI) factory in California and when to open a factory in Mississippi.

Inaba said that Toyota is not profitable in North America despite cost cutting but hopes that the company would be profitable in its next fiscal year. Sales have fallen 38 percent in the first half of 2009 to 770,000 cars and trucks from nearly 1.25 million vehicles in the first half of 2008.

Toyota’s NUMMI plant, a joint venture with General Motors, employs some 4,700 people. Inaba said that since GM withdrew from the pact in bankruptcy court, Toyota is left at a very difficult position and is carefully evaluating all the options.

He said that Toyota is also discussing on what to do with its Mississippi plant. Toyota completed building the facility, but has yet to move in equipment or give a date on when it will open for business. When asked whether Toyota could close the Mississippi plant permanently, Inaba said: “I hope not – I’m not that pessimistic” about its future.

Inaba refused to rule out layoffs or plant closures at its other North American plants.

– By: Stephen Calogera

Source: Detroit News